Live Nation (LYV) shares are down around 15% from its 2024 peak, largely due to concerns regarding a new antitrust probe. According to reports from the Wall Street Journal, the U.S. Justice Department is gearing up to file an antitrust lawsuit against the owner of Ticketmaster, Live Nation, citing alleged “anticompetitive” practices. This legal action could potentially be initiated as early as next month.   

Live Nation has frequently come under public scrutiny for leveraging its dominant position in the live entertainment industry to inflate ticket prices for concerts and other events. In particular, Ticketmaster, a subsidiary of Live Nation, faced backlash in 2022 due to a website malfunction during Taylor Swift’s ‘Eras Tour’ ticket sales, leading to widespread criticism and calls for the breakup of Ticketmaster. Despite these challenges, Ticketmaster achieved record ticket sales in the past year, demonstrating its enduring market presence.   

While Live Nation contends that competition within the ticketing industry remains robust, the intensifying debate surrounding its practices has prompted some investors to offload their shares 

Live Nation Seeks To Set The Record Straight  

Live Nation, the parent company of Ticketmaster, has refrained from commenting publicly on the anticipated antitrust lawsuit but recently countered monopoly allegations through a blog post titled ‘The Truth About Ticket Prices’. In the blog, Live Nation’s Head of Corporate Affairs, Dan Wall, emphasized that Ticketmaster wields minimal influence over ticket prices, attributing pricing decisions primarily to musical artists and venues.   

Wall argued that service charges, often perceived as Ticketmaster’s domain, are predominantly determined by concert venues rather than the ticketing platform itself. He asserted that a significant portion of service charge revenue goes to the venues, with Ticketmaster typically receiving a fraction of this fee.   

To illustrate this point, the blog provided an example of a 30% service fee, indicating that Ticketmaster’s share is approximately one-fourth of the total charge.   

Moreover, the blog highlighted comparisons between Ticketmaster’s commission rates and those of other digital marketplaces, such as StubHub, Uber, and Airbnb, suggesting that Ticketmaster’s share is relatively modest in comparison.   

It also underscored the impact of online resale on ticket prices, particularly for highly sought-after events, where reselling platforms play a significant role in driving up prices. 

By addressing these points, Live Nation aims to challenge perceptions of Ticketmaster as a monopoly and shed light on the complexities of ticket pricing dynamics within the live entertainment industry. 

Wall Street Is Still Very Bullish On LYV 

Despite the looming threat of regulatory action, Wall Street research firms have remained steadfast in their bullish outlook on Live Nation.   

On Tuesday, Roth MKM reiterated its Buy rating on LYV and set a $120 price target, making it the sixth consecutive firm to express optimism about the stock since the Justice Department’s report surfaced. The revised price targets from these six analysts span from $108 to $130, with the midpoint suggesting a potential upside of around 30%.   

Investors are likely to closely monitor Live Nation’s first-quarter earnings call scheduled for May 2nd, seeking insights into how the company addresses the regulatory concerns and its overall performance amid the ongoing scrutiny. 

In the retail sector, fourth-quarter earnings reports are challenging acts to follow. This period includes the busiest shopping days of the entire year, including Black Friday and Cyber Monday. 

However, this doesn’t diminish the value of first-quarter retail sales data for investors. In fact, the January to March stretch can offer significant insights into the health of the American consumer. Outside the winter holiday promotions, Q1 retail data can reveal consumer willingness to spend on discretionary items like spring clothing, lawnmowers, and car repairs.   

Recent updates from the National Retail Federation (NRF) indicate that consumer spending has had a cautious yet positive start this year. After a slight decline in January, core retail sales grew 0.27% and 0.23% month-over-month in February and March, respectively. The NRF forecasts that U.S. retail sales will increase by 2.5% to 3.5% in 2024, reaching up to $5.28 trillion. While this represents a slowdown from last year’s 3.6% growth, it still points to steady growth and a resilient consumer base.  

In the next few weeks, domestic retailers will release their first-quarter earnings reports, which will collectively provide insights into how resilient Americans have been amid persistent inflation and high interest rates. Among the first to report will be these three S&P 500 companies: 

Amazon.com (AMZN)  

Amazon is set to report first-quarter earnings after the market closes on April 30th. The e-commerce behemoth is expected to post a 12% year-over-year revenue increase, matching its 2023 performance. This expectation surpasses the 10% growth projected by management during its Q4 earnings call, likely reflecting anticipated gains in Amazon Web Services (AWS) rather than a surge in online shopping.   

AWS has been revitalized by the global adoption of generative artificial intelligence (AI) technologies. While retail revenue comprised 86% of the company’s revenue in the fourth quarter of 2023, it was the AI-driven AWS that generated 55% of operating profits. With both e-commerce and AI cloud infrastructure demand on the rise, analysts predict Amazon will report a 171% increase in first-quarter EPS. If Amazon exceeds the consensus EPS estimate for the fifth consecutive quarter, its stock could build on its 16% year-to-date increase. 

O’Reilly Automotive (ORLY) 

Auto aftermarket parts retailer O’Reilly Automotive has outpaced consensus EPS estimates for six consecutive quarters, boosting its stock to a record high of $1,169.11 last month. However, ORLY has seen a 6% pullback amid broader market weakness. The company’s revenue and profit growth accelerated in 2023 as car owners opted to extend the life of their existing vehicles to avoid the steep costs of new car ownership.   

However, profit growth may decelerate this year due to cooling car prices and loan rates, as well as rising labor costs. Management anticipates slower comparable sales growth in 2024. With tempered market expectations for Q1 growth compared to recent quarters, it will be interesting to see if O’Reilly maintains its EPS beat streak and whether management will adjust its 2024 outlook in the earnings release on April 24th. 

Tractor Supply (TSCO) 

Tractor Supply announces Q1 financial results before the open on April 25th. Wall Street is anticipating a return to profit growth after Q4 EPS fell 6% largely due to unfavorable weather and the impact of inflation and rates on consumer spending. CEO Hal Lawton believes better times are ahead for the rural retailer saying the macro “headwinds are temporary” in last quarter’s earnings call.   

But with inflation and high rates sticking around longer than expected, Tractor Supply’s discretionary item sales may have suffered again in Q1. The company’s consumable, usable, and edible (CUE) segment has been a source of strength, but will it be enough to deliver above-consensus earnings?   

2024 was expected to be the year when interest rates would start falling in the first quarter. However, the Federal Reserve is now signaling it is under no economic pressure to cut rates at all while some analysts are even modeling rates to move higher as inflation remains difficult to tame.   

On Tuesday, the yield on the U.S. 10-year Treasury note hit 4.7%, the highest level since November 2023. The rate started the year at 3.9% but has been climbing due to various factors.   

Factors such as hotter-than-expected inflation, robust retail sales, and strong labor market data have led investors to adjust their expectations, accepting that rates might remain elevated for longer. The market now predicts that rate reductions might start in September (if at all), suggesting that high rates could persist through the summer.   

This scenario poses a dilemma for income-focused investors: should they opt for 1) low-risk, high-yield government and corporate bonds, or 2) higher-risk, dividend-paying stocks with potential for growth. While both options are viable for long-term portfolios, the appealing yields offered by bonds are increasingly hard to overlook.   

Nevertheless, the enticing yields on these three ‘Dividend Kings’—companies that have raised their dividends for at least 50 consecutive years—are competing strongly with the 10-year note: 

Altria Group (MO): Yield 9.5% 

Altria Group, known for its cigarette brands like Marlboro and Virginia Slims, has been diversifying its portfolio in response to regulatory pressures and shifting consumer health preferences. This shift has led Altria to acquire companies such as NJOY and make investments in sectors like beer with AB InBev and cannabis with Cronos Group.   

Despite these efforts, the diversification process has been gradual, and Altria’s shares have declined by approximately 11% over the past 12 months. However, this decrease in share price has enhanced the attractiveness of the company’s dividend yield, making it one of the highest in the S&P 500. Income investors who are patient enough to wait for the diversification strategy to bear fruit might appreciate the $3.92 annualized dividend, which has increased annually for 55 consecutive years. 

3M (MMM): Yield 6.6% 

Fellow S&P 500 component and Dividend King member 3M has increased its dividend for 67 consecutive years, marking one of the longest streaks in the index. The global industrial conglomerate has faced challenges recently, missing Wall Street’s revenue forecasts for two consecutive quarters. Legal issues related to its Combat Arms Earplugs and a settlement with Public Water Systems have pressured the stock.   

However, profitability has shown signs of improvement, indicating that management’s strategies for margin enhancement are taking effect. Earlier this month, 3M spun off its healthcare business into a separate publicly traded company, Solventum (SOLV), retaining a 19.9% stake in the new entity.   

With ongoing litigation and a renewed focus on its core industrial and consumer businesses, 3M’s stock has begun to recover. It has risen about 30% from its October 2023 low, and with a still attractive dividend yield, it is regaining favor among income investors. 

Leggett & Platt (LEG) Yield 10.6% 

Furniture, bedding, and flooring specialist Leggett & Platt has been navigating through a challenging three-year downtrend, highlighted by supply chain disruptions, a sluggish housing market, and inflationary pressures impacting consumer spending.   

These factors have led to a 70% decline in the stock from its May 2021 peak. In response to these challenges, management recently revised its 2024 sales growth outlook to a decline of 2% to 8%.   

Despite these setbacks, there are signs of a potential turnaround. In January 2024, Leggett & Platt initiated a restructuring plan aimed at attracting more customers, expanding its product offerings, and enhancing profitability.   

Additionally, the company is pursuing growth through acquisitions of smaller, complementary businesses within the fragmented furniture industry. These strategic moves have prompted analysts to revise the consensus earnings estimate for 2025 upwards.   

While the stock carries significant execution risk, its substantial dividend yield may offer a compelling draw for income-focused investors, making it a potentially rewarding, albeit speculative, opportunity.  

According to the Bureau of Economic Analysis (BEA), the digital economy has grown to $2.6 trillion market and now represents 10% of the entire U.S. gross domestic product (GDP). This growth was fueled by the integration of advanced technologies such as e-commerce, cloud computing, data analytics, and blockchain platforms. A critical component of this shift is fifth-generation (5G) technology which brings a new era of smartphone functionality and other digital services.   

Data centers, the powerhouses of the digital economy, store and manage the vast amounts of data and applications that these technologies generate. These facilities are equipped with servers, storage systems, routers, switches, and firewalls that ensure the efficient and secure operation of enterprise IT systems. 

However, the data center sector has faced challenges, including weakened demand for computing and telecom equipment due to tough macroeconomic conditions and supply chain disruptions throughout 2022 and 2023. High interest rates and concerns related to oversupply have also negatively impacted data center companies.   

However, the rise of artificial intelligence (AI) has reinvigorated demand for data storage. AI’s rapid advancements require robust digital infrastructure capable of handling significant storage needs. Alongside AI, smart grids and 5G devices are poised to further boost demand for data centers.   

Global investments in data centers are expected to exceed $400 billion by 2025. For investors looking to capitalize on this trend, there are limited options. Currently, only two publicly traded companies are considered ‘pure plays’ in data center properties: 

Equinix (EQIX)  

Equinix is a real estate investment trust (REIT) that specializes in interconnected data centers and serves a diverse clientele that includes cloud software, IT, financial services, and mobile telecom businesses.   

Equinix manages around 260 data centers across 75 metropolitan areas worldwide, many of which utilize renewable energy sources such as wind farms. This positions Equinix as an environmentally friendly investment option.   

As the larger of the two pure-play data center REITs by market cap, Equinix aims to balance a slower growth profile in North America by expanding its presence in the faster growing regions of EMEA and APAC. The company is also venturing into new markets in South America and Africa, with plans to construct nearly 50 new data centers in 21 countries.   

An additional appealing aspect of investing in Equinix is the stability provided by its lease agreements. Approximately 60% of its customer leases are long-term and expires after 2038.   

Last, Equinix increased its dividend by 25% in October 2023, offering a current yield of 2.2%.  

Digital Realty Trust (DLR) 

Digital Realty Trust is also a real estate investment trust (REIT) that specializes in cloud and carrier-neutral data centers. Catering to enterprises in cloud software, financial services, mobile services, and social media, Digital Realty operates more than 300 properties in 25 countries.   

Digital Realty’s growth strategy is multifaceted, including accretive mergers and acquisitions, joint ventures, and in-house development projects. Additionally, Digital Realty deserves credit for divesting older properties in the U.S. to prepare for growth projects.   

In 2023, Digital Realty’s revenue increased by 17%, surpassing Equinix’s growth of 13%. This performance highlights Digital Realty’s expansion capabilities, particularly its successful international joint ventures in Asia and Europe.   

Although Digital Realty has not raised its dividend in the past two years, it currently offers a dividend yield of 3.4%, which is higher than that of Equinix, making it an attractive option for investors seeking higher income returns.  

The dry bulk shipping industry is volatile in the best of times but the past five years have been particularly challenging. The global pandemic and escalating geopolitical tensions, coupled with the recent catastrophic collapse of Baltimore’s Francis Scott Key bridge has only added to the industry’s concerns, potentially creating even more shipping delays. 

It’s important to note that the struggles of the shipping industry are not recent developments. The Baltic Dry Index (BDI), which tracks shipping rates, reached its peak in 2008, soaring above 11,000 points. Since then, it sharply declined, and the highest level seen since then was approximately 5,100 points in October 2021. 

Currently, the BDI stands at around 1,700 points. While this may not seem particularly impressive, it represents a 6% increase over the last five years. With numerous factors potentially driving up shipping costs, now is an opportune time to explore investments in the often overlooked or underappreciated sector.  

Below are three penny stocks from the shipping industry that have seen better days but possess significant upside potential due to upcoming catalysts. 

This Company Is Adding To Its Fleet 

Globus Maritime (NASDAQ: GLBS) is currently trading below $2 per share and is down more than 25% in 2024. This recent decline came after the stock initially benefited from a spike in the Baltic Dry Index (BDI) following the Red Sea seizure. Currently, the stock is hovering around its 50-day simple moving average (SMA) and is well above its 200-day SMA, indicating potential stabilizing factors for future performance. 

Globus recently expanded its fleet from six to seven ships through the acquisition of a new Ultramax Dry Bulk Vessel named the Glbs Hero. This vessel boasts a capacity of 64,000 dry weight tonnes (DWT), increasing the company’s total fleet capacity to approximately 517,745 DWT. 

The company is not stopping there; plans are in place to add four more ships to its fleet by 2026. These additions are expected to contribute an additional 256,000 DWT, solidifying Globus Maritime’s competitive edge with a more modern and energy-efficient fleet. 

This Company Is Banking On Addition By Subtraction 

Castor Maritime (NASDAQ: CTRM) has seen its stock plummet by over 57% in the past year, mostly due to compliance issues with the Nasdaq exchange that nearly led to its shares being delisting for trading below $1 per share. To rectify this situation, Castor Maritime opted for a “less bad” solution, executing a 1-for-10 reverse stock split. This move mathematically brought the company back into compliance and provided additional time to improve its financial health and convince investors it is on the right track. 

Just days before announcing the reverse split, Castor Maritime sold two of its ships, which reduced its fleet to about a dozen carriers. The asset sale generated $31.9 million which is being allocated to strengthen its balance sheet. This injection of capital is timely, as it positions Castor Maritime to capitalize on potential opportunities for growth should the shipping industry experience a rebound. 

This Shipping Company May Represent The Best Value  

Diana Shipping (NYSE:DSX) presents perhaps the most compelling value proposition in the volatile and competitive shipping sector, with its stock price hovering around $2.88 per share. Despite industry-wide market challenges, Diana Shipping boasts the largest fleet among the companies mentioned above, comprising 40 vessels with plans to add two methanol dual-fuel new-building Kamsarmax dry bulk vessels. 

However, the company’s revenue and earnings have been in decline for several quarters, casting shadows over its financial stability. These concerns could ease if shipping rates normalize as anticipated.  

Unlike its peers, Diana Shipping offers an additional incentive to investors—a dividend. Currently, the dividend’s payout ratio is approximately 69%, which may raise sustainability concerns. Nevertheless, this dividend provides a better reason for investors to consider Diana over its peers, especially with analysts projecting an impressive 106% earnings growth over the next 12 months.